Copper boosted by hopes of US rate cuts, improved Chinese demand

Copper prices rose for the third consecutive session on Friday, supported by expectations of US interest rate cuts following a new appointment to the Federal Reserve, alongside positive economic data from China.

Benchmark three-month copper on the London Metal Exchange (LME) rose by 0.2% to $9,700 per metric ton in official trading, continuing its recovery after touching a three-week low on July 31.

US President Donald Trump announced his nominee for a vacant Federal Reserve seat on Thursday, boosting hopes of rate cuts and weakening the dollar. A weaker dollar makes dollar-denominated commodities cheaper for buyers using other currencies.

“Dollar weakness has been the main driver in August,” said Dan Smith of Commodity Market Analytics. “We’ve got a weaker dollar and China is looking relatively healthy, so fundamentally things are looking positive right now.”

Data released Thursday showed that Chinese exports exceeded expectations in July, as manufacturers took advantage of a fragile tariff truce between Beijing and Washington to boost shipments.

The most-traded copper contract on the Shanghai Futures Exchange rose 0.1% to 78,490 yuan ($10,929) per ton.

Smith noted that copper on the LME appears to have bullish potential according to algorithmic models simulating investment fund behavior, which place buy and sell orders based on momentum signals. “I think there’s a chance that we’ll see buy signals return next week for copper, with a shot at reaching $10,000,” he added.

US Comex copper futures rose 0.7% to $4.43 per pound by 12:15 GMT, widening the price spread between Comex and LME copper to $62 per ton.

On the supply front, investors are monitoring developments in Chile — the world’s largest copper producer — where Codelco is seeking approval to reopen part of a major mine after a fatal accident last week.

As for other metals, performance was mixed: aluminum on the LME held steady at $2,610 per ton, zinc was little changed at $2,812.50, tin rose 0.2% to $33,800, nickel dropped 0.3% to $15,075, and lead fell 0.6% to $1,998.

Meanwhile, the US dollar index declined by 0.2% to 98.2 points by 17:13 GMT, after reaching a high of 98.3 and a low of 97.9.

In US trading, copper futures for September delivery rose by 1.6% to $4.47 per pound as of 17:07 GMT.